FHA Condo Project Types

The FHA classifies projects into different types. The type of project classification dictates the submission and approval requirements. They are:

Proposed project: A new development where no construction has been started.

Under construction: A new development where construction has been started but not completed.

New project: A fully completed project that had its final certificate of occupancy issued less than 12 months prior to the application date.

Existing project: A fully completed project that had its final certificate of occupancy issued over 1 year prior to the application date. For legally phased (not marketing phased) projects, the initial phase must have been completed over one year prior to be considered an existing project.

Non-gut conversion: A project less than 2 years old that changed the property’s title from one title to multiple titles (ex: an apartment turned into multiple condos). The date of conversion is the date of the filing of the condo declaration in the public records. Generally, a non-gut conversion is a project that does not have any structural changes made but does make cosmetic changes. These projects have much more extensive approval requirements under the most recent Mortgagee Letter issued June 30, 2011.

Gut-rehab conversion: A project less than 2 years old that changed the property’s title from one title to multiple titles (ex: an apartment turned into multiple condos). The date of conversion is the date of the filing of the condo declaration in the public records. Generally, a Gut-Rehabilitation conversion is a project that renovates the property down to the shell of the structure and makes structural, mechanical, electrical and plumbing changes. These projects have much more extensive approval requirements under the most recent Mortgagee Letter issued June 30, 2011.

2-4 Unit projects: Although not actually a "type" or phase of construction, smaller projects of 2 to 4 units are eligible to be approved and generally have lower requirements than normal projects, but are subject to the conversion rules if they are a conversion.